On May 7th, Hong Kong-listed AI stocks launched an offensive, with leading internet companies climbing collectively. Kuaishou-W surged over 7%, Alibaba-W rose nearly 5%, Tencent Holdings gained over 3%, Meituan-W increased over 2%, and Xiaomi Group-W rose nearly 1%.

The core tool for Hong Kong AI investment, the Hong Kong Internet ETF Hua Bao (513770), opened higher and maintained gains throughout the session. Its on-market price closed up 2.38%, marking consecutive positive daily closes above both the 10-day and 20-day moving averages.

The driving forces behind the strong market performance stem partly from warming expectations for US-Iran negotiations, which have boosted risk appetite domestically and internationally. More importantly, it is fueled by expectations of a valuation reassessment for internet leaders due to the accelerated pace of AI commercialization.

Recent developments show Tencent's Hunyuan model releasing new data: since its launch, token usage for the Hy3 preview version has continuously increased, now totaling more than 10 times that of the previous generation model, Hy2. This increase is particularly notable in code and intelligent agent scenarios, where total growth in applications like WorkBuddy, CodeBuddy, and Qclaw has exceeded 16.5 times.

Over the past two months, Tencent Cloud and Alibaba Cloud have successively entered a price hike cycle. On April 28th, Tencent Cloud announced price increases for CodeBuddy and WorkBuddy, with the Enterprise Flagship version seeing an approximate 154% rise. This marks Tencent Cloud's third price adjustment this year, following earlier hikes on select AI models, AI computing power, and container services. Similarly, Alibaba Cloud implemented three price adjustments within four days in April, affecting its large model service platform Bailian, DDoS protection, and DataWorks API.

These signs indicate that the AI narrative is reaching a phase of performance validation. Notably, both Alibaba and Tencent are scheduled to release their Q1 2026 financial results on the 13th of this month, with market sentiment generally optimistic. Cloud business performance is expected to be robust, primarily driven by three factors: demand release from AI industrialization, the launch of new-generation AI cloud products, and adjustments to some service prices.

Guosheng Securities believes that Alibaba's full-stack AI layout is most comparable to Google's, expecting its cloud growth rate to accelerate further in Q1, thereby continuously validating investment returns. For Tencent Holdings, its foundational model capabilities are gradually catching up, and the implementation of WeChat Agents is expected to clarify the monetization path for AI investments, with a positive outlook on its subsequent AI narrative.

Since the beginning of the year, adjustments in the Hong Kong stock market have been primarily influenced by sentiment and overseas liquidity constraints rather than a deterioration in fundamentals. After deep corrections, sector valuations have fallen to a historical low near the 14.18th percentile over the past five years, suggesting limited downside potential. As AI commercialization continues to materialize, supported by attractive sector valuations, inflows from southbound capital, and improving overseas liquidity, the Hong Kong internet sector is poised for a dual recovery in both valuation and profitability.

To capitalize on the 2026 AI commercialization milestone, focus on core Hong Kong AI tools. The Hong Kong Internet ETF (513770) and its feeder funds passively track the CSI Hong Kong Stock Connect Internet Index. Its top ten holdings, comprising over 78% weight, aggregate tech giants like Alibaba-W and Tencent Holdings, along with AI application companies across various sectors, highlighting significant leadership advantages. The ETF offers intraday T+0 trading with good liquidity.

For investors bullish on Hong Kong tech but seeking to reduce volatility, consider the market's first Hong Kong Large Cap 30 ETF (520560). It employs a "tech + dividends" barbell strategy, holding both high-growth tech stocks like Alibaba and stable, high-dividend stocks from sectors like banking and insurance, making it an ideal long-term core holding for Hong Kong market exposure.

A reminder: Recent market volatility may be significant, and short-term price movements do not predict future performance. Investors should make rational investment decisions based on their financial situation and risk tolerance, paying close attention to position sizing and risk management.

A MACD golden cross signal has formed, indicating positive momentum for these stocks.